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Types of Gold Coins: Overview

Blog Dec 29, 2011

A very rare gold Brasher Doubloon coin, minted in 1787, was sold recently for a staggering amount of $7.4 million is only one example of rare Gold Coins in existence. Blanchard and Co., a New Orleans-based gold coin trading company, brokered the deal and confirmed that the coin was bought by a Wall Street firm. The Doubloon coin was minted by goldsmith Ephraim Brasher, who was incidentally George Washington’s neighbor. The coin, which contains 26.66 grams (less than ounce) of gold, was worth $15 when minted in 1787. The November 2011 market value for gold was approximately $1700 an ounce.

Types of Gold Coins: The Most Widely Traded Items

The American Gold Eagle is one of the most popular series. Termed as the official coin series of the United States of America as decreed by the Gold Bullion Act, 1985. The series was first manufactured by the US Mint in 1986, and has a gold content of 91.6 percent. The rest of the coin is made up of copper and silver, with a composition of 5.33 percent and 3 percent respectively.

Some other well known gold coin series in the market today are:

• The South African Krugerrand: Originally minted in 1967, the Krugerrand series was manufactured to attract international investors to South African gold. Unlike most gold coins that have face values assigned to them, the Krugerrand coin series does not have one. The worth of the coin is solely determined by the market value of gold, as influenced by the forces of demand and supply; among other factors.

• The Russia Gold Chevronets: The gold Chevronets, originally minted in 1701, predated the Russian ruble. The series was released again after the Russian Revolution to offset the devaluation of the ruble. The production was discontinued in 1925. Supposedly, there are only five original gold Chevronets in circulation, making them a highly priced possession. However, hundreds of Chevronets were re-minted to commemorate the Summer Olympics of 1980. These are regarded as a collectors’ item as well.

• The Canadian Gold Maple Leaf: Manufactured by the Royal Canadian Mint, these series are minted only with the gold mined in Canada. With a composition of 99.99 percent gold, the Maple Leaf is the purest coin series in the world. A special promotional gold Maple Leaf coin, with an oversized width of 55cm and thickness of 3cm, was unveiled in 2007. The coin had an astounding face value of $1 million. Not intended as a collector’s item originally, the coin attracted immediate interest. Additional mintage of the coin is expected to be undertaken by the government soon.

Investing in Different Types of Gold Coins: An Overview of Q3 Economic Fundamentals

The current November 2011 market price of gold bullion is approximately $1,712 an ounce, an increase of 24 percent from December 2010. The World Gold Council reported that virtually all markets witnessed strong increase in the demand for gold:

• In the US, the demand for old in 3Q11 mushroomed by 6 percent over the same period in 2010, and reached 1,053.9 tons. The demand growth was primarily driven by higher investment in gold, which spiked by 33 percent year-on-year.

• In Europe, the investment demand in 3Q11 reached a record high at €4.6bn, a 135 percent year-on-year increase.

• Russia and China, among several other nations around the world, continued to increase the allocation of gold to their reserves.

On the supply side, there has been a 2 percent increase in 3Q11 year-on-year. Production in gold mines grew by 5 percent, while the gold recycling activity registered a modest 13 percent year-on-year growth. Although the demand grew at a faster pace than the market supply in 3Q11, there was no major disconnect for gold used in gold coins.

Sources & References In This Article

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